Archive for the ‘markets’ Category
Several writing group colleagues and I were discussing one participant’s extended conference abstract about “prefigurative” groups that have an impact upon society. The author contended that for a variety of reasons – in particular, pressures exerted by the state, most groups are unable to exact larger change. Another colleague suggested looking at studies of the sharing economy, which some might see as a contemporary version of the 1960s-1970s collectivist-democratic organizations.
“Paradoxes of openness and distinction in the sharing economy”
This paper studies four sites from the sharing economy to analyze how class and other forms of inequality operate within this type of economic arrangement. On the basis of interviews and participant observation at a time bank, a food swap, a makerspace and an open-access education site we find considerable evidence of distinguishing practices and the deployment of cultural capital, as understood by Bourdieusian theory. We augment Bourdieu with concepts from relational economic sociology, particularly Zelizer’s “circuits of commerce” and “good matches,” to show how inequality is reproduced within micro-level interactions. We find that the prevalence of distinguishing practices can undermine the relations of exchange and create difficulty completing trades. This results in an inconsistency, which we call the “paradox of openness and distinction,” between actual practice and the sharing economy’s widely articulated goals of openness and equity.
The authors show how class-based stratification can inhibit heterogeneous membership and exchanges, especially when members refuse to make exchanges with persons of lower class. In the time bank, some participants donated their time without drawing back time. They also preferred to volunteer skills that they didn’t use in the workplace, declining to offer desired legal and programming expertise.
The food swapping collective, which arose out of the founders’ desire to decrease food waste among single professionals, is particularly fascinating for its participants’ designation of acceptable vs. unacceptable homemade offerings:
Such research suggests that such sharing economies may be doomed to one-time, never-to-be-repeated exchanges when participants fixated on the parity (or potential status-enhancement) of possible exchanges. While other participants attempted to form community by making exchanges as a matter of practice or as a means of socializing newcomers, it seems these exchanges are not enough to sustain these collectives.
Remember acid rain? For me, it’s one of those vague menaces of childhood, slightly scarier than the gypsy moths that were eating their way across western Pennsylvania but not as bad as the nuclear bombs I expected to fall from the sky at any moment. The 1980s were a great time to be a kid.
The gypsy moths are under control now, and I don’t think my own kids have ever given two thoughts to the possibility of imminent nuclear holocaust. And you don’t hear much about acid rain these days, either.
In the case of acid rain, that’s because we actually fixed it. That’s right, a complex and challenging environmental problem that we got together and came up with a way to solve. And the Acid Rain Program, passed as part of the Clean Air Act Amendments of 1990, has long been the shining example of how to use emissions trading to successfully and efficiently reduce pollution, and served as an international model for how such programs might be structured.
The idea behind emissions trading is that some regulatory body decides the total emissions level that is acceptable, finds a way to allocate polluters rights to emit some fraction of that total acceptable level, and then allows them to trade those rights with one another. Polluters for whom it is costly to reduce emissions will buy permits from those who can reduce emissions more cheaply. This meets the required emissions level more efficiently than if everyone were simply required to cut emissions to some specified level.
While there have clearly been highly successful examples of such cap-and-trade systems, they have also had their critics. Some of these focus on political viability. The European Emissions Trading System, meant to limit CO2 emissions, issued too many permits—always politically tempting—which has made the system fairly worthless for forcing reductions in emissions.
Others emphasize distributional effects. The whole point of trading is to reduce emissions in places where it is cheap to do so rather than in those where it’s more expensive. But given similar technological costs, a firm may prefer to clean up pollutants in a well-off area with significant political voice rather than a poor, disenfranchised minority neighborhood. Geography has the potential to make the efficient solution particularly inequitable.
These distributional critiques frequently come from outside economics, particularly (though not only) from the environmental justice movement. But in the case of the Acid Rain program, until now no one has shown strong distributional effects. This study found that SO2 was not being concentrated in poor or minority neighborhoods, and this one (h/t Neal Caren) actually found less emissions in Black and Hispanic neighborhoods, though more in poorly educated ones.
A recent NBER paper, however, challenges the distributional neutrality of the Acid Raid Program (h/t Dan Hirschman)—but here, it is residents of the Northeast who bear the brunt, rather than poor or minority neighborhoods. It is cheaper, it turns out, to reduce SO2 emissions in the sparsely populated western United States than the densely populated east. So, as intended, more reductions were made in the West, and less in the East.
The problem is that the population is a lot denser in the Northeastern U.S. So while national emissions decreased, more people were exposed to relatively high levels of SO2 and therefore more people died prematurely than would have been the case with the inefficient solution of just mandating an equivalent across-the-board reduction in SO2 levels.
To state it more sharply, while the trading built into the Acid Rain Program saved money, it also killed people, because improvements were mostly made in low-population areas.
This is fairly disappointing news. It also points to what I see as the biggest issue in the cap-and-trade vs. pollution tax debate—that so much depends on precisely how such markets are structured, and if you don’t get the details exactly right (and really, when are the details ever exactly right?), you may either fail to solve the problem you intended to, or create a new one worse than the one you fixed.
Of course pollution taxes are not exempt from political difficulties or unintended consequences either. And as Carl Gershenson pointed out on Twitter, a global, not local, pollutant like CO2 wouldn’t have quite the same set of issues as SO2. And the need to reduce carbon emissions is so serious that honestly I’d get behind any politically viable effort to cut them. But this does seem like one more thumb on the “carbon tax, not cap-and-trade” side of the scale.
This has been hanging in my mind ever since the Department of Justice report on the Ferguson police department came out a couple of weeks ago. I’ve been loathe to write about it for fear of trivializing the events in Ferguson. Also, it seems somewhat obvious. But I think it’s important to highlight how the problem the Ferguson PD is facing is not a problem unique to the criminal justice system, but that it shares with other social institutions. Since I haven’t seen it discussed elsewhere — though feel free to comment if you have — here goes.
In its damning indictment of the Ferguson PD — an indictment that has already cost the police chief and the city manager their jobs — DOJ points to the city’s focus on generating revenue as causing many of its problems. In combination with systemic racism, which the DOJ report also documents, the city of Ferguson has come to see its residents — especially its African-American residents — as cash machines rather than citizens it is meant to serve and protect. In the words of the report,
The City’s emphasis on revenue generation has a profound effect on FPD’s approach to law enforcement….Officer evaluations and promotions depend to an inordinate degree on ‘productivity,’ meaning the number of citations issued. Partly as a consequence of City and FPD priorities, many officers appear to see some residents, especially those who live in Ferguson’s predominantly African-American neighborhoods, less as constituents to be protected than as potential offenders and sources of revenue.
Sometimes I worry that something analogous is in the future of higher ed. Not just that budget cuts will starve it into a shadow of its former self, or that it is coming to serve more as a mechanism of social exclusion than mobility. (Though I worry about those things too.)
My biggest fear is that a similar focus on revenue generation — on seeing students not as people to be educated but as income streams — will essentially corrupt the institution. And it will do so in ways that are most harmful to the least advantaged.
Student debt is in the news a lot these days. It currently stands at $1.2 trillion in the U.S., having surpassed credit card debt in 2010. The Occupy movement pushed the issue onto the front pages with its call for debt forgiveness, and since then loans have bounced in and out of the news under headlines like “crisis” and “crippling.”
Of course, there’s always two ways of looking at things. Since the college wage premium (or, more accurately, the noncollege penalty) has increased, plenty of folks have argued that college, loans and all, is still a great deal despite rising tuition, and that many students should actually be borrowing more.
That’s hard to tell an underemployed 24-year-old, but never mind. In general, our shift toward loan-driven higher ed financing is a big problem. But there’s one important, and often overlooked, way in which things have gotten better. Much better.
Psych experiments show that we tend to overvalue objects that we possess – according to a coffee mug experiment, we would be willing to sell one that we have at a certain price, but others would not be willing to pay that same price. What happens when the object is a non-human family member?
When negotiating the sale of their home, one Australian family was willing to give up their cat Tiffany to the new homeowners for $140,000 (about $120K in US dollars). Some readers of the article announcing this exchange felt their pets were priceless, while others pointed out that cats are territorial and may not tolerate moves.
Don’t expect some cats to reciprocate your affectionate feelings – according to one medical examiner, cats will consume your lips and other edibles should you expire in your home. Sweet dreams, kitty owners.